SYNYGY, INC. v. ZS ASSOCIATES, INC.
REDACTED MEMORANDUM AND ORDER FILED 2/11/15. SIGNED BY HONORABLE THOMAS N. ONEILL, JR ON 3/3/15. 3/3/15 ENTERED AND COPIES E-MAILED. (Attachments: #(1) Pt. 2)(mbh, )
a!k/a Troll Company ApS v. Russ Berrie & Co., Inc., 290 F.3d 548, 561 (3d Cir. 2002).
I must determine whether Synygy's documents and software macros are subject to
copyright protection. Copyright protects original works of authorship fixed in any tangible
medium of expression from which they can be perceived and which are not "any idea, procedure,
process, system, method of operation, concept, principle, or discovery .... " 17 U.S.C. § 102.
An original work is one that is both independently created (i.e., not copied) and creative. Feist,
499 U.S. at 345. "[T]he requisite level of creativity is extremely low; even a slight amount will
suffice. The vast majority of works make the grade quite easily, as they possess some creative
spark, no matter how crude, humble or obvious it might be." Id.
In response to defendants' summary judgment motion on copyright, Synygy contends
that its copyrighted reports and software macros are presumptively valid under 17 U.S.C. §
410(c). Pl.'s Copyright Opp'n Mem. at 26. Section 410(c) provides that:
[i]n any judicial proceedings the certificate ofa registration made
before or within five years after first publication of the work shall
constitute prima facie evidence of the validity of the copyright and
of the facts stated in the certificate. The evidentiary weight to be
accorded the certificate of a registration made thereafter shall be
within the discretion of the court.
17 U.S.C. § 410(c).
The principle that a certificate represents prima facie evidence of
copyright validity has been established in a long line of court
decisions and is a sound one. . . . [E]ndowing a copyright claimant
who has obtained a certificate with a rebuttable presumption of the
validity of the copyright does not deprive the defendant in an
infringement suit of any rights; it merely orders the burdens of
proof. The plaintiff should not ordinarily be forced in the first
instance to prove all of the multitude of facts that underlie the
validity of the copyright unless the defendant, by effectively
challenging them, shifts the burden of doing so to the plaintiff.
Mortgage Mkt. Guide, LLC v. Freedman Report, LLC, No. 06-CV-140-FLW, 2008 WL
2991570, at* 15 (D.N.J. July 28, 2008), quoting H.R. Rep. No. 1476, 94th Cong., 2d Sess. 157,
reprinted in 1976 U.S. Code. Cong. & Ad. News 5659, at 5773; see also Masquerade Novelty,
Inc. v. Unique Indus., Inc., 912 F.2d 663, 668-69 (3d Cir. 1990) (finding that the presumption is
rebuttable and "shifts to the defendant the burden to prove the invalidity of the plaintiffs
Synygy Macros No.1 and No.2.
The certificates of copyright registration for Synygy Macros Nos. 1 and 2 are prima facie
evidence of the validity of their copyrights. 17 U.S.C. § 410(c). Defendants thus bear the
burden to establish a material dispute as to whether Synygy Macros Nos. 1 and 2 are validly
Instead of setting forth evidence to show that the. copyrjghts in Synygy Macros No. 1 and
No. 2 are invalid, defendants argue that "Synygy appears to have effectively dropped liability
theories based on [the software macros] from the case" because, inter alia "Synygy's damages
expert conceded at deposition that Synygy' s damages claim did not include the 'Synygy
Software Macros' because Synygy has no evidence that Defendants used the macros." Defs.'
Copyright Mein. at 11 n.4. This argument is misguided, however, as it goes to the question of
whether defendants engaged in unauthorized copying of the software macros and cannot satisfy
defendants' burden of establishing a material dispute with respect to the presumed validity of
Synygy's copyrights in Synygy Macros No. 1 and No.2. I find that defendants are not entitled
to summary judgment based on an invalidity argument with respect to the software macros.
Synygy Reports No. 1
Applicability of tbe Presumption of Validity
The certificate of copyright registration for the Synygy Reports No. 1 notes that "material
excluded from this claim" included "NOVO NORDISK logos, trademarks and trade names" and
lists as "[n]ew material included in claim: text, Formatting, graphics, organization, selection and
arrangement of information." Defs.' Ex. 76. However, under "Copyright office notes" at the
bottom of the certificate of registration for Synygy Reports No. 1, the certificate of registration
states "[r]egarding author information and new material included: Formatting not
copyrightable." 8 Defs.' Ex. 76.
Despite the Copyright Office's note on the certificate of registration for Synygy
Reports No. 1, the regulations ofthe Copyright Office do not specifically include "formatting" in
the following list of items that may not be copyrighted:
(a} Words and short phrases such as names, titles, and slogans;
familiar symbols or designs; mere variations of typographic
ornamentation, lettering or coloring; mere listing of ingredients or
(b) Ideas, plans, methods, systems, or devices, as distinguished
from the particular manner in which they are expressed or
described in a writing;
(c) Blank forms, such as time cards, graph paper, account books,
diaries, bank checks, scorecards, address books, report forms,
order forms and the like, which are designed for recording
information and do not in themselves convey information;
(d) Works consisting entirely of information that is common
property containing no original authorship, such as, for example:
Standard calendars, height and weight charts, tape measures and
rulers, schedules of sporting events, and lists or tables taken from
public documents or other common sources.
(e) Typeface as typeface.
37 C.F.R. § 202.1.
Defendants thus contend that there can be no presumption of validity for Synygy Reports
No. 1 because "the Copyright Office expressly found that no copyright extended to any
formatting in the reports." Defs.' Copyright Mem. at 1, citing Defs.' Ex. 76. Defendants argue
that "no presumption attaches to any color shading, use of color, borders, fonts, border
thicknesses, font sizes, font styles, breaking the report into sections with borders, or the way the
sections relate in Reports No. 1."9 Defs.' Copyright Reply at 2-3. Defendants further contend
because Synygy has disclaimed ownership over everything else in
the reports- e.g., Novo's name, its product names, data, text, and
standard industry terminology- and Synygy does not own any
parts of the reports or reports designs that contain Novo's
proprietary information ... , there is nothing in the reports over
which any arguable presumption of validity would apply.
Id. at 2.
I find that the Copyright Office's footnote creates an ambiguity with respect to the scope
of any copyright in Synygy Reports No. 1. "The mere fact that a work is copyrighted does not
mean that every element of the work may be protected." Feist, 499 U.S. at 348. Those items
which are specifically excluded from the copyright registration under the heading "Limitation of
copyright claim"- Novo logos, trademarks and trade names- cannot be subject to the
presumption. Further, the Copyright Office's footnote leaves me with no way to distinguish
between formatting, which is "not copyrightable," and the other material which is included in
Synygy's copyright claim: "text, ... graphics, organization, selection and arrangement of
When asked what aspects of a report were "formatting," Synygy' s 30(b)( 6)
designee suggested that formatting includes: "[c]olor shading, use of color, the borders, the
fonts, the border thicknesses, the font sizes, the font styles, the breaking the report into sections
with borders, the way the sections relate." Pl.'s Ex. 10 (Synygy Rule 30(b)(6) Dep. (Evernham))
information." Pl.'s Ex. 63. "Formatting" is not defined on the certificate of registration, is not
defined by the Copyright Act, 17U.S.C. § 101, and is not defined by the regulations of the
Copyright Office. 37 C.P.R. § 202.1. Because of the ambiguity created by the Copyright
Office's footnote, I decline to apply the presumption of validity to Synygy Reports No. 1.
Accordingly, I must consider whether plaintiff has otherwise met its burden to prove that some
or all of the materials included in Synygy Reports No. 1 are sufficiently original to warrant
The Blank Forms Doctrine
Defendants argue that Synygy's management reports and incentive compensation report
scorecards are "not copyrightable as a matter of law" because they are blank forms. Defs.'
Copyright Mem. at 17-21.
The basic principle behind denying copyright protection to "blank
forms" lies in the concern that providing such protection would
give the copyright owner undue protection over the idea
underlying the form, i.e., there are often very few methods to
express the content of a form such as a calendar or time sheet and
one individual could draw up these variations, copyright them, and
thus obtain a virtual monopoly on such clearly useful ideas as a
record of the days and of one's time and activities. Further, the
majority of such forms are simple and require like [sic] ingenuity
to design, so little incentive (protection) is required to motivate
designers, while the use (communication) of the form is very
important to society.
Digital Commc'ns Assocs., Inc. v. Softklone Distrib. Corp., 659 F. Supp. 449, 462 (N.D. Ga.
Although the copyright regulations provide that "applications for registration of [blank
forms] cannot be entertained," 37 C.P.R. § 202.1, "this circuit, like the majority of courts that
have considered the issue, has ... held that blank forms may be copyrighted if they are
sufficiently innovative that their arrangement of information is itself informative." Whelan
Assocs., Inc. v. Jaslow Dental Lab., Inc., 797 F.2d 1222, 1243 (3d Cir. 1986); see also Digital
Commc'ns Assocs, 659 F. Supp. at 457 ("'blan.t< forms' which are designed for recording
information and which do not themselves convey information are not copyrightable"). "Whether
a form conveys information is a fact-bound determination .... " Safeguard Bus. Sys., Inc. v.
Reynolds and Reynolds Co., No. 88-1426, 1990 U.S. Dist. LEXIS 3617, at *7 (E.D. Pa. March
30, 1990). But cf. Tastefully Simple, Inc. v. Two Sisters Gourmet, L.L.C., 134 F. App'x 1, 4
(6th Cir. 2005) ("Whether a form is a "blank form," and therefore not entitled to copyright
protection, is a question of law for the court to decide."). Blank forms do not convey
information if the
headings [are] so obvious that their selection cannot be said to
satisfy even minimal creativity .... Such a work conveys no
information, not just because it contains blanks, but because its
selection of headings is totally uninformative. On the other hand,
if a scorecard or diary contained a group of headings whose
selection (or possibly arrangement) displayed cognizable
creativity, the author's choice of those headings would convey to
users the information that this group of categories was something
out of the ordinary.
Kregos v. Associated Press, 937 F.2d 700, 708-09 (2d Cir. 1991). Examples of noncopyrightable blank forms include "time cards, graph paper, account books, diaries, bank checks,
scorecards, address books, report forms, order forms and the like, which are designed for
recording information and do not in themselves convey information." 37 C.F.R. § 202.1(c). I
must decide whether the documents included in Synygy Reports No. 1 are like these noncopyrightable blank forms, or whether they convey sufficient information to warrant copyright
In support of their argument."[t]hat Synygy's blank forms convey no information,"
Defs.' Copyright Resp. at 7, defendants submit the report of their expert Tony Buglione, who
considered "demonstrative exhibits" presented to him by Counsel for ZS that Buglione found to
"fairly and accurately reflect those aspects of the Incentive Compensation Reports ... that do not
include Novo text, numbers and colors." Defs.' Ex. 8 (Buglione Report) at 54; see also Defs.'
Copyright Mem. at 19-20 ("In analyzing the scorecards, one should also mentally remove the
material that Synygy has admitted it does not own."). Scrubbed of"terms that are standard
industry parlance, ... the titles of the reports, the name Novo Nordisk, the names of Novo
Nordisk's products, Novo Nordisk's Apis bull logo, the blue color scheme used in the reports,
dates, the numbers of actual product volume targets and attainments," id. at 53, the exhibits in
question indeed appear to be nothing more than a blank grid. Id. at 55.
Defendants also argue that the reports "plainly do not by themselves convey any
information: they are replete with zeros for things like payout amounts, the individual variables
from which payout amounts are calculated and employee ID numbers, and have entries like
"LAST NAME, FIRST NAME" and "TERR_NAME" instead of actual employee or territory
names." Defs.' Copyright Mem at 1. They contend that "the blank report forms do not convey
any information until they are populated with the pertinent factual information" that Synygy
removed from the reports before their submission to the Copyright Office. Id. Plaintiff counters
that "[e]ven if the Court gives credence to defendants' argument that the zeroed out values of the
copyright deposits affects whether the copyrighted reports convey information, the evidence is
still such that a reasonable jury could find that Synygy' s copyrighted reports are not blank
forms." Pl.'s Copyright Opp'n Mem. at 33.
I agree with defendants that Synygy cannot have a copyright in the "numbers and words"
or other facts included in Synygy Reports No. 1. Defs.' Copyright Mem. at 19. First, facts are
not subject to copyright protection. Feist, 499 U.S. at 344 ("facts are not copyrightable; ...
compilations of facts generally are"); see also Whelan, 797 F.2d at 1234 ("It is axiomatic that
copyright protects only the expression of ideas and not the ideas themselves."). Further, the data
contained in the reports (e.g., earnings calculations, territories, employee IDs, product names,
etc.) belongs to Novo or to a third party data aggregator, not to Synygy. See PVs Ex. 39
(Incentive Compensation Services Agreement) at ~ 7 ("[Novo] shall be the sole and exclusive
owner of [Novo's] proprietary information."); see Defs.' Ex. 4 (Lee Report) at 26-27 ("most
pharmaceutical manufacturers ... purchase their sales data from the same small set of data
However, in its copyright registration application for Synygy Reports No. 1, Synygy
claimed a copyright in, inter alia, the "organization, selection and arrangement of information."
Defs.' Ex. 77 at 1. Synygy's "claims of copyright protection are [appropriately] predicated upon
each report as a whole - how all ofthe elements in a report are selected, arranged, and visualized
in a way that communicates information to the recipient in what Synygy believes to be the most
clear, effective, and aesthetic[ally] pleasing manner." Pl.'s Copyright Opp'n Mem. at 41
(emphasis added), citing Pl.'s Ex. 10 (Synygy Rule 30(b)(6) Dep. (Evemham)) at 80:7-96:22;
108:24-11 0:25; 169:6-176:25. As plaintiff contends, "[t]o determine copyrightability, a court
need not - and, indeed, should not- dissect every element of the allegedly protected work.
Rather, the court need only identify those elements that are copyrightable, and then determine
whether those elements, considered as a whole, have been impermissibly copied." Allen-
My land, Inc. v. IBM Corp., 770 F. Supp. 1004, 1006-07; see also Pl.'s Copyright Opp'n Mem.
at 39 ("defendants engage in an improper 'dissection' analysis in challenging the expressive and
informative nature of Synygy' s copyrighted reports"). As the Court explained in Rottlund Co. v.
Pinnacle Corp., when considering the copyrightability of technical drawings containing known
architectural elements where the plaintiff claimed protection in its selection, arrangement and
coordination of the elements:
(d]efendants would have the Court find that nothing protectible
remains after filtering the individual elements; the drawings merely
being sheets of paper shareable amongst architects and builders to
copy at will. That would be acceptable if no expression remains in
the drawings for copyright "encourages others to build freely upon
the ideas and information conveyed by a work." ... As urged by
Rottlund, however, the Court finds that the selection, arrangement,
and combination of the elements expressed in the technical
drawings are sufficiently original and detailed to be afforded
No. 01-1980,2004 WL 1879983, at *14 (D. Minn. Aug. 20, 2004), report and recommendation
adopted (Oct. 19, 2004), quoting Feist, 499 U.S. at 350; see also Boisson v. Banian, Ltd., 273
F.3d 262, 272 (2d Cir. 2001) ("[A] court is not to dissect the works at issue into separate
components and compare only the copyrightable elements. To do so would ... result in almost
nothing being copyrightable because original works broken down into their composite parts
would usually be little more than basic unprotectible elements like letters, colors and symbols.")
(internal citation omitted); Real View, LLC v. 20-20 Techs., Inc., 683 F. Supp. 2d 147, 157 (D.
Mass. 201 0) ("The fact that each individual icon or feature on a screen cannot be necessarily
copyrighted does not deny the screen itself, as the sum of those icons or features, copyright
"Although a work may contain numerous unprotectable elements, the work may still be
entitled to copyright protection as a compilation." Id. at 152. I find that even though Synygy's
copyright registration application characterized Synygy Reports No. 1 as "text," rather than as a
compilation, Defs.' Ex. 77 at 1, the documents included in Synygy Reports No. I are more
properly characterized as compilations of incentive compensation data. "A 'compilation' is a
work formed by the collection and assembling of preexisting materials or of data that are
selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an
original work of authorship." 17 U.S.C. § 101. "[E]ven a purely factual compilation is
copyrightable when it involves: (1) the assembly of pre-existing material, factors, or data; (2)
the selection, coordination, or arrangement of those materials; and (3) the creation, by virtue of
the particular selection, coordination, or arrangement, of an 'original' work of authorization."
Thornton v. J Jargon Co., 580 F. Supp. 2d 1261, 1272 (M.D. Fla. 2008) (internal quotations and
It is possible to consider whether Synygy's reports are worthy of copyright protection as
compilations even when they are scrubbed of their original data values and include only the
placeholder values included in the reports deposited with the Copyright Office. What I must
decide is "whether the arrangement ... viewed in the aggregate, is original." Key Publ'ns, Inc.
v. Chinatown Today Pub1'g Enters .. Inc., 945 F.2d 509, 514 (2d Cir. 1991; see also Feist, 499
U.S. at 357 (holding that copyright protection may extend to original selection, coordination or
arrangement of facts even though the facts themselves are not protected); Gemel Precision Tool
Co. v. Pharma Tool Corp., No. 94-5305, 1995 WL 71243, at *5 (E.D. Pa. Feb. 13, 1995) (finding
defendants had not met their burden to show invalidity where they had "not proffered any
evidence which indicates that the facts contained in the [computer] databases are devoid of any
particularized selection or arrangement such that they could not be considered protected
compilations"). "When it comes to the selection or arrangement of information, creativity
inheres in making non-obvious choices from among more than a few options." Matthew Bender
& Co. v. West Publ'g Corp., 158 F.3d 674, 682 (2d Cir. 1998). "[C]reativity in selection and
arrangement ... is a function of (i) the total number of options available, (ii) external factors that
limit the viability of certain options and render others non-creative, and (iii) prior uses that
render certain selections 'garden variety."' Id. at 682-83.
I find that plaintiff has not met its burden to show that the management reports included
in Synygy Reports No. 1 warrant copyright protection. On the evidence before me, I find that no
reasonable factfinder could find that the management reports are sufficiently informative or
original to constitute something other than non-copyrightable blank forms such as those
identified in 37 C.F.R. § 202.1(c).
Defendants analogize Synygy Reports No. 1 to the documents considered in Safeguard
Business Systems, Inc. v. Reynolds and Reynolds Co., No. 88-1426, 1990 U.S. Dist. LEXIS
3617, at *7 (E.D. Pa. March 30, 1990), affd without op., 919 F.2d 136 (3d Cir. 1990). See
Defs.' Copyright Mem. at 14-15. There, following a non-jury trial, the Court considered whether
sheets" which were "intended to provide healthcare practitioners with a
complete system for review and control of billing, collections, and receivables" were blank
forms not subject to copyright. Safeguard, 1990 U.S. Dist. LEXIS 3617 at *2. Safeguard had
argued that its day sheets taught "how to prepare accounts receivable control and month-tomonth proof of accounts" with the use of "color coding and lettering," id. at *8, but the Court
found that there was evidence that the forms were "usable only after training or with written
instructions," id. at *9, and concluded that the day sheets were "forms that merely ease the
recording of information." Id. at * 10. Also, the Register of Copyrights had determined that the
day sheets "were not copyrightable" and the Court found that the Register's decision was
"entitled to deference." Id. at * 14. The Court concluded that the "day sheets are designed to
record information and do not convey sufficient information to entitle them to copyright
protection," instead, they conveyed only "de minimis information." Id. at * 13-14.
Confronted with similar facts in Utopia Provider Systems, Inc. v. Pro-Med Clinical
Systems, L.L.C., 596 F.3d 1313, 1324 (11th Cir. 2010), on appeal from a decision on summary
judgment, the Court of Appeals for the Eleventh Circuit declined to find that a set of forms used
by treating physicians was copyrightable. To make its determination, the Court explained that
"[w]e look first to whether the headings are anything other than what would be expected ... ,
and second to whether the terms actually convey information .... " Id. at 1322. The Court noted
that the forms called for "personal information such as the patient's name, date of birth, sex, and
chief complaint ... [,] the history of the present illness, a review of systems, medical and social
history, physical exam, medical decision making, clinical impressions, and finally, consultation,
disposition, and instructions." Id. at 1323. The Court observed that there was testimony that the
content in the forms was consistent with what "a physician doing a systems review of an
emergency room patient would consider as a part of his job," although the physician might not
necessarily consider the terms in the same order or document them in the same fashion. Id.
(internal quotation omitted). The Court found that the selection and arrangement of terms in the
forms was not original and did not convey information. Id. at 1324. Instead, the forms were
"better analogized to [a] non-copyrightable baseball scorecard or travel diary with generic
headings." ld. at 1323; see also Bibbero Sys., Inc. v. Colwell Sys .. Inc., 893 F.2d 1104 (9th Cir.
1990) (affirming district court's determination that a medical "superbill" was not copyrightable
where it was a blank form that included only "simple instructions to the patient on how to file an
insurance claim using the form, such as 'complete upper portion of this form"'); M.M. Bus.
Forms Corp. v. Uarco, Inc., 472 F.2d 1137, 1140 (6th Cir. 1973) (finding no valid copyright in a
form for television servicemen where there was "no distinguishable variation in any of [the]
simplistic legal arrangements [identified in the form] that can be attributed to the drafter's own
Ultimately, I find that plaintiff has not distinguished the management reports t!·om the
documents considered in Safeguard Business Systems or Utopia Provider Systems .. Even if the
management reports were "very useful" for determining certain product performance
information, see Pl.'s Ex. 66 (Apr. 27,2006 Novo-ZS Email at ZSA 000259270), plaintitihas
not shown that a genuine dispute exists with respect to whether the management reports are
sut11ciently creative or original to warrant copyright protection. The management reports are
comprised of various spreadsheets that include fields for categories including, inter alia, territory,
role, name, rank, status, eligibility, goal attainment and earnings. Pl.'s Ex. 64 at 8-23. The
tabular headings identified in the management report spreadsheets are not the result of "making
non-obvious choices from among more than a few options." Matthew Bender & Co., 158 F.3d at
682. Rather, they are terms whose use would be expected in order to convey the
transmitted in the reports. Indeed, Synygy's own expert opined that the incentive compensation
terms that appeared on the reports created by Synygy for Novo were "commonly occurring terms
within pharmaceutical incentives and used across many pharmaceutical incentive compensation
plans. This phenomenon is, in large part, caused by the unique restrictions placed on
pharmaceutical sales tracking, which then drives most pharmaceutical manufacturers to purchase
their sales data from the same small set of data vendors." Defs.' Ex. 4 (Lee Report) at 26-27.
Asked whether there were "any words" in a Circle of Excellence Report "that are not standard
industry terminology," former Synygy employee Thomas Lenox responded, "[n]o." Defs.' Ex.
32 (Lenox Dep.) at 11 7: 12-17. Asked the same question about a Verification Report- a
"report that show[s] us ... just general parameters ... trying to highlight anything that could
potentially be an issue," Lenox again answered "[n]o." Id. at 118:1-12. Lenox also responded
"[n]o" when he was asked whether there were any words in an Earnings Summary Report that
were "not either the names of Novo Nordisk products or standard industry terminology." Id.at
Defendants contend that "Novo would ... instruct Synygy about which fields should
appear in the reports and in what order." Defs.' Copyright Mot. at 6; see, e.g., Defs.' Ex. 19
(Sakhrani Dep.) at 254:2-259:15 (testifying with respect to Novo's involvement in the inclusion
of data in a Circle of Excellence report). Synygy's Rule 30(b)(6) witness provided conflicting
testimony that Synygy employees "would have designed the-- selected which data to be
displayed, selected what headings were going to be used, and selected the order in which that
information was going to be presented." Pl.'s Ex. 10 (Synygy Rule 30(b)( 6) Dep. (Evernham))
at 202:2-6. However, as defendants argue, Evernham "admitted that the order of the headings
was 'functional' and based on a 'logical decisio.n.'" Defs.' Copyright Mem. at 17, quoting Pl.'s
Ex. 10 (Synygy Rule 30(b)(6) Dep. (Evernham)) at 200:8-201:13. Specifically, describing one
of the management reports, Evernham testified that:
In this case it's a tabular report. There's a lot less complexity on
this report than some of the others that we've looked at. But even
so, the order in which the information is presented is presented in a
functional way and in a way that establishes understanding and
clarity based on how the recipient will use the report.
So, yes, I do expect that they designed - maybe not the, you know,
the sequence that- territory was the first one; that's just maybe a
Pl.'s Ex. 10 (Synygy Rule 30(b)(6) Dep. (Evernham)) at 200:23-201:9. Similarly, Lenox was
asked whether he could "say one way or the other whether it was Synygy as opposed to Novo
that determined the order of the headings that we see, beginning with "Territory" and ending
with "YTD Payout" in an Earnings Summary Report. Id. at 125:24-126:4. He responded, "I
think the layout of this is sort of logical in the way that it flows, so I don't know- I would say
it's more Synygy than Novo, but I can't answer the question with 100% yes or no." Id.at 126:713. Asked what he meant by the term "logical," Lenox responded:
So you basically, have your product earnings and you have them
sort of in order of importance to Novo. And then you have a total
earnings column which sort of gives you a breakout of your
product and then you can see what your totals are. And then
eligibility is applied and added to- and, you know, eligibility is
applied to the total earnings and you sort of get your final payout.
So if you're thinking about it, it's like very brand specific and then
it gets, you know, like more towards the final payout as you go to
And then sort of, at the far right, you could see how you did in the
first POA, how you would have done in the second. I would
imagine that POA 2 would be next to that and then year-to-date
would be following that.
Id. at 126:17-11. Likewise, a Preliminary Payout Factors Report "sort of has the same logical
flow to it. You know, you start with your volume, you have your goal. The volume divided by
your goal is attainment." Id. at 131 :2-6.
"[S]ummary judgment may properly be granted where a jury could not, as a matter of
law, tinct that the alleged copied material was original to the plaintiff." Mid Am. Title Co. v.
Kirk, 867 F. Supp. 673,681 (N.D. Ill. 1994). I find that plaintiff has not shown that a genuine
dispute remains with respect to whether the arrangement of the data transmitted in the
management reports is the result of an "exercise of subjective selection and judgment," id. at 683
(N.D. Ill. 1994), that is sufficiently original or informative to warrant a finding that Synygy has a
valid copyright in the management reports. Accordingly, I will grant summary judgment in
favor of defendants on Synygy' s copyright infringement claim insofar as it pertains to the
management reports contained in Synygy Reports No. 1.
Ineentive Compensation Report Scorecards
The other documents included in Synygy Reports No. 1 are various incentive
compensation report scorecards. Pl.'s Ex. 64 at 2-7. Plaintiff asserts that the reports "are
creative and original works designed to convey inventive compensation-related information to
the recipient." Pl.'s Copyright Opp'n Mem. at 28. I find that, unlike with the management
reports, Synygy has set forth evidence sufficient to raise a material question of fact with respect
to whether the incentive compensation report scorecards convey sufficient information and are
sut1iciently original to warrant copyright protection.
Defendants argue that "[a]lthough the scorecards are not in the format of tables and
contain more headings, they, like the home office tables, do not convey any information until the
particular data and information concerning the particular sales rep and his/her particular
performance in the particular time period are recorded in the scorecard." Defs.' Copyright Mot.
at 18-19. They contend that "without the correctly recorded information [which Synygy omitted
from the reports deposited with the Copyright Office], the scorecard conveys no information."
Id. at 19. Plaintiff counters that "even an IC report with a payout of $0 conveys valuable
information to the recipient regarding why the payout was $0 and what calculations and business
rules led to that determination .... " Pl.'s Copyright Opp'n Mem. at 33-34. Viewing the
summary judgment record in the light most favorable to plaintiff, I find that whether the
incentive compensation report scorecards are sufficiently informative to warrant copyright
protection is an issue for the jury.
The incentive compensation report scorecards are designed to guide Novo's sales
representatives through an understanding of their incentive compensation. Asked about the
purpose of incentive compensation report scorecards similar to those included in Synygy's
copyright deposit, see Pl.'s Ex. 79, Novo Nordisk's 30(b)(6) witness, Kathleen Mulroney,
testified that "the reports are just actually really sort of like report cards going through the year."
Pl.'s Ex. 37 (Mulroney Dep.) at 148: 12~14. She explained,
we would train -~ teach the reps, we would communicate to the
reps what the -- through their sales management, what the
[incentive compensation] plan was and that was constantly
reiterated in all communications, meet your goal, beat your goal
and the reports were some of the underlying context were saying,
okay, where do I stand this month relative to making my goal.
Id. at 58:1-8. Lenox testified about the information conveyed by a payout factor graph on an
incentive compensation report scorecard:
So the darker blue line with the I guess little diamond points is the
payout curve and the blue dotted -light blue dotted line or bright
blue dotted line is the goal .... [T]he sort of dark grayish blue line
would be the rep's performance and how that relates to.the goal
and/or the payout curve.
Defs.' Ex. 32 (Lenox Dep.) at 77:25-78:8. As defendants' expert explained when considering a
report from a 2004 presentation showing ZS Associates' IC administration capabilities," that
included information"comparable" to information contained in Synygy's incentive
compensation report scorecards,
[t]he graphs toward the bottom of the report are graphical
expressions of the data in the table above. The line graph
illustrates the rep's attainment performance over the current
period, and the bar graph shows the relative attainments for each
product of the nation as well as the sales rep's region and district in
order to allow the sales rep to measure how his or her performance
falls among each of those three divisions. This type of data can
also motivate a sales force by giving them feedback about the
company as a whole, which ties their performance to something
bigger than just their own territory and own payout.
Defs.' Ex. 8 (Buglione Report) at 64,.66.
In F.A Davis Company v. Wolters Kluwer Health, Inc., 413 F. Supp. 2d 507, 514 (E.D.
Pa. 2005), the Court considered whether copyright protection could attach to blank forms which
were "apparently designed to assist a nurse in recording a brief, general report regarding each
patient .... " The Court found that the forms "seem[ed] to evince the requisite originality and
informativeness to be protected" because, "[b]eyond merely structuring a nurse's notes, the
assessment forms actually guide nurses step-by-step through the information they need to obtain
from a patient." Id. (emphasis added). From the evidence before me, I cannot conclude that the
selection and arrangement of the information contained in the incentive compensation report
scorecards is not similarly informative to the forms considered in F .A. Davis - as the scorecards
are designed to guide Novo's sales representatives through an understanding of their incentive
I also find that questions of fact remain with respect to whether the design of the
incentive compensation report scorecards is sufficiently original to wa.rrant copyright protection.
InDigital Communications Associates, Inc. v. Softklone Distributing Corporation, 659 F. Supp.
449, 463 (N.D. Ga. 1987), the Court held that a status screen for a computer program could be
copyrighted where "[t]he specific placement, arrangement and design of the parameter/command
terms on the status screen is neither arbitrary nor predetermined, but rather, is the result of
extensive original human authorship." The Court held that "the status screen, which is a
compilation, is copyrightable to the extent of its arrangement and design of parameter/command
terms," explaining that "[w]hile some of the choices of the two symbols to represent certain
parameter/command terms may not be original, ... other choices of symbols are clearly
original." Id. Similarly, copyright protection was found to be appropriate for "the selection,
coordination and arrangement of the information contained in ... (1) screen displays, (2) action
grids, (3) data compilations, and (4) data tables" in O.P. Solutions Inc. v. Intellectual Property
Network, Ltd., No. 96-7952, 1999 WL 47191, at *20 (S.D.N.Y. Feb. 2, 1999). The Court made
its finding while considering "copyright protection of so-called 'blank forms'" because the
screen displays included a grid that was "to a large extent a form in which the user enters
information. Id.at * 12. The Court held that " a form will be entitled to protection so long as it
conveys a minimal degree of creativity." Id. at* 13. Likewise, in Bucklew v. Hawkins, Ash.
Baptie & Co., LLP, 329 F.3d 923, 928 (7th Cir. 2003), the Court found that the plaintiff had an
enforceable claim to copyright in tables in a computer program where the tables were
"configured in an optional way, ... the product of format choices that are not unavoidable, for
which indeed there were an immense number of alternative combinations any one of which [the
defendant] was free to use instead of [the [plaintiff's]."
"When there is essentially only one way to express an idea, the idea and its expression
are inseparable and copyright is no bar to copying that expression." Concrete Machinery Co. v.
Classic Lawn Ornaments, Inc., 843 F.2d 600, 606 (1st Cir. 1988). But that is not the
circumstance before me with the incentive compensation report scorecards. Synygy's expert
Peter Lee opines that
it is clear that there is no industry standardization with respect to
incentive compensation report design- the selection of data, the
arrangement of data, and the visual representation of the data.
Each vendor takes a unique approach that is a clear departure from
the others with respect to the placement of client logos,
information contained in the report header, ratio of text vs. charts,
selection of color palette, placement of summary payout
information, decision to show or not show earning calculations,
selection of relevant supporting data, size of the report page, and
other design features.
Defs.' Ex. 4 (Lee Report) at 22. Defendants' expert agreed that "[a]nynumber oflayouts and
formats are effective and clear at conveying the substance and elements of the IC plan design and
the accuracy of calculations." Defs.' Ex. 8 (Buglione Report) at 58. Indeed, Buglione's report
opines at length with regard to the ditTerent ways in which incentive compensation reports can be
formatted. Id. at 58-76. He explains that"[ c]ompanies might have different reasons for opting
for a text-based IC report over the type of one-page, multi-color, graphical IC reports at issue in
this case." Id. at 74. Novo's designee also testified that Novo had more than one option with
respect to how to format their incentive compensation reports. See Pl.'s Ex. 37 (Mulroney Dep.)
at 183: 13-15 ("Well, in terms of ultimate reports and what they looked like, we could have
moved things in a different place."). It follows that "[t]he arrangement [of the incentive report
scorecards] is in no sense mechanical, but involved creativity on the part of' Synygy. Key
Publ'ns, Inc. v. Chinatown Today Publishing Enters., Inc., 945 F.2d 509, 514 (2d Cir. 1991)
(finding that the decision regarding "which categories to include" in a business directory and
"under what name" ... "entailed the de minimis thought needed to withstand the originality
requirement"). As the Court explained in Bucklew, 329 F.3d at 929-30, "[i]t is not as if
everyone who writes programs of this sort uses Swiss font or displays an output range or uses a
particular pattern of boldfacing." It follows that it is not as if everyone who prepares an
incentive compensation report scorecard uses the same selection and arrangement of information.
In his report, defendants' expert asserts that "[t]he choices regarding which types of
content to include [in an IC report] are decisions driven by the client and its IC plan, not the IC
administration vendor." Defs.' Ex. 8 (Buglione Report) at 70; see also Pl.'s Ex. 37 (Mulroney
Dep.) at 31:1-4 ("The reports need to reflect the structure of [Novo's incentive compensation]
plan so that there was an implication for how the reports would be laid out based on what the
plan was."). Buglione testified, however, that
I don't recall any plan dictating what information should be
displayed in an IC report. The assumption would be that if the
plan, for example, is measuring NRx market share goal attainment
at a national level, which is what earlier Novo Nordisk plans did,
then it would make sense that that information, those
measurements and metrics, would appear on a plan document. But
there was nothing specifically in the plan document that said this is
the number that absolutely must appear on the IC goal report.
Pl.'s Ex. 25 (Buglione Dep.) at 84:23-85:8. Plaintiff thus contends that "Novo's IC plan
documents do not dictate that a report is required at all, much less the content to be displayed in a
report or how the report should be designed." Pl.'s Copyright Opp'n Mem. at 32. Indeed, asked
whether there was "anything about the plan documentation that requires [an incentive
compensation report scorecard] to be laid out in the fashion" of a report prepared by Synygy for
Novo, Novo's designee Mulroney testified that "[t]here's nothing that specifies it except sort of
·business logic and reading sequencing that would be natural to people." Pl.'s Ex. 37 (Mulroney
Dep.) at 168:9-16.
Indeed, any argument that the selection and arrangement of the information in the
incentive compensation report scorecards· is not sufficiently original to warrant copyright
protection is undermined by evidence that ZS could create "enhanced" alternatives to the
Synygy-prepared incentive compensation report scorecards, as is reflected by the following
testimony from the Rule 30(b)(6) deposition of ZS partner Florent Moise.
Let's talk about the scorecard report.
There were a number of enhancements that were suggested
by ZS and accepted by Novo Nordisk.
Okay. And there were enhancements to the reports that
I guess the report that existed is their report that existed.
We had to, basically, do our own set of that. ... Well, ZS
had to create, basically, and customize some of our reports,
such that we would make sure that they have the basically, that they meet Novo Nordisk requirements.
Pl.'s Ex. 56 (Moise Dep.) at 124:12-125:12. See Snap-on Bus. Solutions Inc. v. O'Neil &
Assocs., Inc.,708 F. Supp. 2d 669, 685-86 (N.D. Oh. 2010) (finding that the defendant's own
evidence "belie[d] its argument that efficiency artd function dictate[ d] the ... structure" of the
plaintiti's copyrighted proprietary database where, for example, the defendant "believed it could
provide a better database ... precisely because it would alter the arrangement of the data").
Viewing the facts in the light most favorable to Synygy as the non-moving party, I find
that it cannot be said as a matter of law that the incentive compensation report scorecards found
in Synygy Reports No. 1 are not sufficiently innovative or informative to warrant a copyright.
Because I find that a reasonable jury could find that Synygy's incentive compensation report
scorecards are not uncopyrightable blank forms, I will deny defendants' motion for summary
judgment to the extent that it rests on a copyright invalidity argument with respect to the
incentive compensation report scorecards.
Because I find that material questions of fact remain with respect to whether Synygy
holds a valid copyright in the Software Macros No. 1 and No. 2 and/or the incentive
compensation report scorecards, I must consider whether there is a triable issue with respect to
the second element of Synygy' s claim for copyright infringement: "copying of constituent
elements of the work that are original." Feist, 499 U.S. at 361. Plaintiff contends that
"defendants have not raised any issues concerning infringement" and "there is unrebutted
evidence of direct copying." Pl.'s Copyright Opp'n Mem. at 27 n.ll. Synygy argues that "in a
case such as this one where defendants have admitted to using copyrighted material, 'that alone
would make the defendant[s]' liable for copyright infringement, absent the owner's
authorization." Id.,.quoting Stenograph, L.L.C. v. Sims, No. 99-5354, 2000 U.S. Dist. LEXIS
9619, at *7 (E.D. Pa. July 12, 2000).
In the absence of direct evidence of copying, copying may be proved inferentially "by
showing that the defendant had access to the copyrighted work and that the original and
allegedly infringing works share substantial similarities." Kay Berry, Inc. v. Taylor Gifts, Inc.,
421 F.3d 199, 207-08 (3d Cir.2005) (citations omitted); see also Peel & Co. v. The Rug Market,
238 F.3d 391, 398 (5th Cir.2001) ("[N]ot all copying is legally actionable. To support a claim
for copyright infringement, the copy must bear a substantial similarity to the protected aspects of
The issue of access is not in dispute. As I have previously noted, ZS has stipulated that
"in late 2005 and early 2006, ZS received from Defendant Novo Nordisk, Inc. ("Novo")
electronic materials from Synygy's incentive compensation management services for Novo,
including the macros contained in those materials," and that "ZS received such materials via CD
and e-mail." Pl.'s Ex. 57. Accordingly, I must determine whether there is sufficient evidence of
substantial similarity to permit plaintiffs claims with respect to Synygy Macros. No. 1 and 2 and
the incentive compensation report scorecards to go to the jury. "The standard used to detect
substantial similarity is 'whether an ordinary lay observer would detect a substantial similarity
between the works."' Am. Bd. oflnternal Med. v. Von Muller, No. 10-2680,2012 WL
2740852, at *4 (E.D. Pa. July 9, 2012), affd (Sept. 12, 2013), quoting Nat'l Conference of Bar
Exam'rs v. Multistate Legal Studies, Inc., 413 F. Supp. 2d 485, 487 (E.D. Pa. 2005) (further
Synygy Macros No.1 and No.2
Defendants contend that "without any damages for copyright infringement relating to the
macros and without a finding that they were ever used, there is no need for a trial, and summary
judgment should therefore be entered on the copyright claim insofar as Macros I and Macros II
are concerned." Defs.' Copyright Reply. at 13-14. Defendants make this argument based on the
deposition testimony of Synygy' s damages expert, who explained, "I haven't attempted to
calculate any revenue derived from use of the macros or the code to generate fees. It's my
understanding [defendants] didn't use it." Defs.' Ex. 13 (Hampton Dep.) at 265:19-20. Whether
Synygy suffered damages as a result of defendants' alleged infringement of Synygy's copyright
in Synygy Macros No. 1 and No.2 is not, however, dispositive of whether defendants can be
found liable for infringement of Synygy Macros No. 1 and 2. 10 And I find that Scott Hampton's
testimony is not dispositive of whether or not defendants copied the macros. 11
In his report, Synygy's expert Peter Lee compared the macro code contained in a Synygy
incentive compensation report (SYN 0094710) and a ZS report (ZSA000000466) and found that
Under the Copyright Act the owner of a registered copyright that has been
infringed may elect at any time before final judgment is rendered to recover either actual
damages and any additional profits of the infringer or statutory damages. See 17 U.S.C. § 504.
In its second amended complaint, plaintiff asks me to "[i]ssue an order requiring ZS and Novo to
account for all gains, profits and advantages derived from their acts of misappropriation ... "
and seeks an award for, inter alia, "loss of profits, damages for infringement" and "statutory
damages in the amount of$150,000 per infringement based upon ZS's and Novo's acts ofwillful
infringement, pursuant to the Copyright Act of 1976, 17 U.S.C. § 101 and 504(c), et seq ..... "
Second Am. Compl. at p. 22, ~~ k, m, n. Because Synygy has asserted a claim for statutory
damages, its failure to set forth evidence of actual damages with respect to Synygy Macros No. 1
and No.2 is not fatal on summary judgment to Synygy's copyright claim with respect to the
Indeed, Synygy's expert qualified his statement by explaining that "[m]y
understanding is [the macros'] use was limited to copying it, holding it, and they didn't use it to
provide services." Id. at 265:14-16. He explained that his damages
calculation is consistent with the fact pattern that there was use of
the macros and the code in the sense that it was copied, that it was
led, but I don't know that it was actually used to provide services .
. . . I consider use holding something or copying it. And I think
there was that type of use. But my understanding is it wasn't used
to provide services. It didn't generate directly the accused
Id. at 264:11-265:5.
the comparison "shows an exact duplication of the SYNYGY VBA code exists in the ZS report"
and that "[c]omparing line-by-line VBA code in SYN0094710 and ZSA000000000466 shows
that the VBA code in those report templates are 100% identical." Defs.' Ex. 4 (Lee Report) at 6;
see also id. at 50-65. The code Lee reviewed in his report appears to be substantially similar (if
not identical) to the code set forth in the unredacted copy of Synygy Macros No. 1 in plaintiffs
Exhibit 87. Also, defendants' expert Cliff Ragsdale testified that a number of reports delivered
by ZS to Novo contain macros which are identical to the macros copyrighted by Synygy. See
Pl.'s Ex. 27 at 56:19-23 ("Q. And would you agree that the VBA macrocode in the Synygy
workbook that is SYN-94710 appears almost identically in the workbook that is ZSA466? A.
Yes."). Asked why ZS would copy Synygy's macro code, he speculated that a ZS employee:
had a file and someone probably was told to copy it not knowing
what was in it to begin with in which case it probably wasn't a
specific decision on their part to copy that piece of code; just like
they probably didn't specifically decide to copy all the range
names either. It just happens as part of the copying process.
Id. at 176:14-177:2.
On these facts, I find that genuine issues of material fact require denial of defendants'
motion for summary judgment on plaintiffs copyright infringement claim with respect to
Synygy Macros No. 1 and No. 2.
Incentive Compensation Report Scorecards
Likewise, I find that genuine issues of material fact remain with respect to whether
defendants copied the incentive compensation report scorecards. In their memorandum in
support of their motion for summary judgment, defendants nowhere contend that they did not
copy the incentive compensation report scorecards .. See Defs.' Copyright Mem. In its response
to defendants' motion, Plaintiff contends that "[d]efendants have admitted to using Synygy's
copyrighted reports, and at least tens of thousands of reports that ZS delivered to Novo contain
digital 'fingerprints' proving that they were copied from Synygy's electronic files." Pl.'s
Copyright Resp. at 37, citing Defs.' Ex. 4 (Lee Report) at 2-11.
Suggesting that Synygy's incentive compensation report scorecards were copied, in an
email one ZS employee instructed another ZS employee working on mockups of reports for
Novo to "[p]lease check the File>Properties>Summary Tab to ensure that we have no references
to Synygy/any other company than ZS." Defs.' Ex. 4 (Lee Report) at 67 (copy of
ZSA000242853). Synygy's expert explained in his report that Synygy's reports were "used as
the foundation for the report design that was deployed by ZS to NOVO .... ZS proposed minor
changes to the report notes and footnotes, some data visualization changes of the same dataset as
the SYNYGY incentive reports, and no incentive data presentation strategy modifications."
Defs.' Ex. 4 (Lee Report) at 8. Lee noted that "Document ZSA000241572 describes in detail the
adjustments that were proposed by ZS for the SYNYGY designed [incentive compensation
report scorecard] prior to deployment by ZS." Id. He concludes that the
list of the 6 proposed changes represent (at best) an adjustment to
an existing report and is not a transformation or redesign. No
design changes were made to the selection of the data items
(especially the summary top sections of the report) and no design
changes were made to the arrangement of data items. The bottom
of the report included a modification of the graphical
representation of a selected set of data but was not a modification
of the data selection or calculation process.
Id. at 9. Lee's conclusions are in line with the testimony ofZS's 30(b)(6) designee Moise that:
Novo Nordisk wishes [sic] was to have as little disruption as
possible for its sales force, and therefore-- ... they wanted us to
either match or enhance the actual, the reports that they were
currently distributing. As an example, of course -- like company
logo, etcetera, it has to be retained .... I think they wanted to
have some continuity between the reports that they were using at
that time and what ZS would be producing.
Pl.'s Ex. 56 (Moise Dep.) at
Similarly, Kathleen Mulroney, Novo Nordisk's
30(b)(6) witness, testified that when ZS took over from Synygy the job of preparing Novo's
in terms of ultimate reports and what they looked like, we could
have moved things in a different place. We didn't move a lot of
things to lessen a disruption in the field and not that it's a big
disruption to move something a few inches down but just to
minimize the disruption in the questions that we would get.
Pl.'s Ex. 37 (Mulroney Dep.) atl83:13-19.
Even if ZS made some "enhancements" to the incentive compensation report scorecards,
"[ v]ariants that result from tinkering with a copied form are derivative works from that form, and
it is a copyright infringement to make or sell a derivative work without a license from the owner
of the copyright on the work from which the derivative work is derived." Bucklew, 329 F.3d at
930; Pickett v. Prince, 207 F.3d 402,405-407 (7th Cir.2000); see also National Conference of
Bar Examiners v. Multistate Legal Studies, Inc., 458 F.Supp.2d 252, 258 (E.D. Pa. 2006) ("less
than wholesale reproduction can also provide a sufficient basis to conclude that there was
copying"). On the record before me I find that there is sufficient evidence of copying to require
that Synygy's copyright claim with respect to the incentive compensation report scorecards be
submitted to a jury.
State Law Claims
In defendants' fourth motion for summary judgment, they seek summary judgment on
plaintiff's state law claims for unfair competition (Counts IV and V), breach of contract (Count
VI), tortious and intentional interference (Counts VII, IX and XI), conversion (Count X) and
unjust enrichment/quantum meruit (Count XII).
Defendants first seek summary judgment with respect to Synygy' s claims for unjust
enrichment quantum/meruit, conversion, tortious and intentional interference, unfair competition
and breach of contract, 12 arguing that these claims are preempted pursuant to the Copyright Act's
express preemption provision found at 17 U.S.C. § 301. Specifically, the Copyright Act
all legal or equitable rights that are equivalent to any of the
exclusive rights within the general scope of copyright as specified
by section 106 in works of authorship that are fixed in a tangible
medium of expression and come within the subject matter of
copyright as specified by sections 102 and 103.
17 U.S. C. § 301. "[T]he preemption provision does not apply if the subject matter does not
come within the subject matter of copyright .... " Dun & Bradstreet Software Servs., Inc. v.
Grace Consulting, Inc., 307 F.3d 197,216-17 (3d Cir. 2002) (citation and internal quotation
Synygy contends that "defendants misappropriated and disclosed ... Synygy confidential
information, which are [sic] outside of the subject matter of copyright law." Pl.'s State Law
Response at 29. Specifically, Synygy asserts that its "state law causes of action based on
defendants' wrongdoing with respect to the IC simulator, Excel Named Ranges, and background
excel datasheets are not preempted since they are not the subject of copyright law." Id. But
Synygy's state law claims set forth in its second amended complaint appear to encompass
Although plaintiff devotes a portion of its response to defendant's motion to an
argument that its trade secret misappropriation causes of action are not preempted by the
Copyright Act, see Pl.'s State Law Response at 25-29, defendants do not contend that Synygy's
trade secret misappropriation causes of action are preempted by the Copyright Act. See Defs.'
State Law Reply at 1 ("Defendants did not move to preempt Synygy's trade-secret claims [under
the Copyright Act] because, in the Third Circuit, it is difficult to apply§ 301 to trade-secret
materials which fall within the subject matter of copyright law. See, e.g., Second Am. Com pl.~
132 (claiming Novo breached its contract by "reproducing, distributing and using copies ofthe
Synygy Software Macros, the Synygy Reports, and other Confidential
(asserting a claim for unfair competition under New Jersey law for defendants' use of"Synygy's
trade secrets, confidential business and technical information, and other goods and services").
As is further set forth above, Synygy's software macros and incentive compensation report
scorecards clearly fall within the subject matter of copyright. Thus to the extent that plaintiffs
state law claims rest on these materials, the claims may be subject to preemption where they are
"equivalent in substance to a federal copyright claim." Gemel Precision Tool Co., Inc. v.
Pharma Tool Corp., No. 54-5305, 1995 WL 71243, at *5 (E.D. Pa. Feb. 13, 1995).
Courts employ a "functional test" to determine whether a state law cause of action is
preempted by the Copyright Act: "if a state cause of action requires an extra element beyond
mere copying, preparation of derivative works, performance, distribution or display, then the
state cause of action is qualitatively different from, and not subsumed within, a copyright
infringement claim and federal law will not preempt the state action." Dun & Bradstreet, 307
F.3d at 217, citing Data Gen. Corp. v. Grumman Sys. Support Corp., 36 F.3d 1147, 1164 (1st
Cir. 1994). "To determine whether a claim is qualitatively different, the Court looks at what the
plaintiff seeks to protect, the theories in which the matter is thought to be protected and the rights
sought to be enforced." Tegg Corp. v. Beckstrom Elec. Co., 650 F. Supp. 2d 413, 422 (W.D. Pa.
2008) (quotations and citations omitted). Defendants argue that Synygy's claims for unjust
enrichment quantum/meruit, conversion, tortious and intentional interference, unfair competition
and breach of contract are preempted because they "assert rights that are equivalent to rights
protected under the Copyright Act: The state law claims, like the federal copyright claim, are
rooted in the alleged unauthorized copying and distribution of the incentive compensation reports
that Synygy deposited in the Copyright Office." Det's.' Copyright Mem. at 1-2. I will consider
each claim in turn.
Unjust Enrichment/Quantum Meruit (Count XII)
Plaintiff's claim for unjust enrichment/quantum meruit does not state an extra element
not included in a claim under the Copyright Act. Plaintiff alleges that "ZS has been unjustly
enriched" in that it "has enjoyed the benefit of the skills, expertise, knowledge and intellectual
property of Synygy, which enabled ZS to unlawfully gain an entry into the sales compensation
management market without investing in the training of employees and/or research and
development ofintellectualproperty." Second Am. Compl.
165-66. "The foundation of
[Synygy's] claim is that [defendants] ha[ve] exploited [its] intellectual property without
compensating [Synygy] for the benefits derived from such use." Video Pipeline, Inc. v. Buena
Vista Home Entm't, Inc., 210 F. Supp. 2d 552, 567 (D.N.J. 2002). Synygy's claim "necessarily
involves [defendants'] acts in reproducing, distributing and displaying [Synygy's software
macros and incentive compensation report scorecards], all of which are encompassed in rights
protected under copyright law." Id.; see also VisualCommc'ns, Inc. y. Assurex Health, Inc,, No.
14-3854,2014 WL 4662474, at *9 (E.D. Pa. Sept. 18, 2014) ("Plaintiff's quantum meruit claim .
. . does not contain an 'extra element' beyond a traditional copyright infringement claim, because
the quantum meruit claim seemingly seeks compensation for Defendant having profited from the
use of Plaintiff's drawing and thus seeks to protect the same rights as those protected by the
Copyright Act."); CollegeSource. Inc. v. AcademyOne, Inc., No. 10-3542,2012 WL 5269213, at
* 13 (E.D. Pa. Oct. 25, 20 12) (finding plaintiff's unjust enrichment claim was preempted under
the Copyright Act and that "[t]he extra element of misrepresentation, or taking in an
underhanded way, does not avoid preemption"). I will grant summary judgment in favor of
defendants on plaintiff's unjust enrichment claim to the extent that it relates to Synygy's
software macros and incentive compensation report scorecards.
Conversion (Count X)
In its second amended complaint, Synygy claims that "ZS intentionally, willfully and
wantonly converted Synygy's intellectual property by unlawfully obtaining and utilizing
Synygy's proprietary trade secrets and confidential information about the services provided to
Synygy's clients." 13 Second Am. Compl. ~ 158. "Conversion is a tort by which the defendant
deprives the plaintiff of his right to a chattel or interferes with the plaintiff's use or possession of
a chattel without the plaintiff's consent and without lawfhl justification." Pittsburgh Constr. Co.
v. Griffith, 834 A.2d 572, 581 (Pa. Super. Ct. 2003).
To the extent that Synygy's conversion claim relates to its software macros and incentive
·Plaintiff's second amended complaint does not specify whether its claim for
conversion falls under the law of Pennsylvania or New Jersey. In its response to defendants'
motion, plaintiff defends its conversion claim only under Pennsylvania law. See Pl.'s State Law
Opp'n Mem. at 43-45 (setting forth the elements of a claim for conversion under Pennsylvania
law). Accordingly, I will consider plaintiff's claim under the law of Pennsylvania.
To the extent that plaintiff's second amended complaint could be construed as bringing a
claim for conversion under New Jersey law, I agree with defendant that the claim would fail
insofar as it relates to plaintiff's intellectual property. See Defs.' State Law Mem. at 30; see also
StrikeForce Techs., Inc. v. WhiteSky, Inc., No. 13-1895,2013 WL 3508835, at *8 (D.N.J. July
11, 2013), quoting Video Pipeline, Inc. v. Buena Vista Home Entm't, Inc., 210 F. Supp. 2d 552,
568 (D.N.J. 2002) ("a cause of action for conversion relates to interference with tangible
property and does not protect rights to intangible property" and "[s]oftware code, trade secrets,
and other intellectual property have generally been recognized as intangible property, that is,
property without physical embodiment"). In contrast, it has been held that "Pennsylvania law
recognizes that trade secrets can be the object of conversion." Schmidt, Long & Assoc., Inc. v.
Aetna U.S. Healthcare, Inc., No. 00-CV-3683, 2001 WL 856946, at *8 (E.D. Pa.July 26, 2001),
citing Fluid Power Inc. v. Vickers, Inc., No. 92-0302, 1993 WL 23854, at *3 (E.D. Pa. Jan. 28,
1993); cf. Partners Coffee Co .. LLC v. Oceana Servs. & Prods. Co., No. 09-236, 2009 WL
4572911, at *7 (W.O. Pa. Dec. 4, 2009) ("permitting a conversion claim based on Defendants'
alleged diversion of confidential data from Plaintiff's computer system ... to proceed" following
a motion to dismiss).
compensation report scorecards, I find that it is preempted under the Copyright Act. "Although
copyright law does not protect possession, per se, implicit in the ownership rights conferred by §
106 is the power to control the use of the copyrighted materials." Gemel Precision Tool, 1995
WL 71243, at *6 (finding "the conversion claim is identical to [the plaintiff's] exclusive right to
copy, to create derivative works from, and to distribute the copyrighted materials, as provided for
by § 106"). When "plaintiff's conversion claim" arises "from copying and misuse of its work,
it" is "functionally equivalent to a copyright claim." Tegg Corp., 650 F. Supp. 2d at 432. This is
not a case where the conversion claim seeks the return of"tangible, physical property, the rights
to which are distinctly different from those rights involved in" plaintiff's copyright claim. Video
Pipeline, 210 F. Supp. 2d at 568-69 (finding conversion claim was not preempted to the extent
that it sought the return of allegedly converted items). Here, through its conversion claim
plaintiff seeks to recover for the unauthorized use of Synygy materials including its copyrighted
software macros and incentive compensation report scorecards. Section 301 preempts such a
claim. I will grant summary judgment in favor of defendants on plaintiff's conversion claim to
the extent that it relates to Synygy' s software macros and incentive compensation report
Tortious and Intentional Interference (Counts VII, IX and XI) and
Unfair Competition under New Jersey Common Law (Count V) 14
Defendants' motion for summary judgment addresses plaintiff's Count V claim
for unfair competition under New Jersey common law along with plaintiff's claim under the New
Jersey Fair Trade Act. See Defs.' State Law Mem. at 20-22. The claim is, however,
appropriately addressed with plaintiff's claims for tortious and intentional interference. "New
Jersey courts have noted that, in essence, unfair competition is a business tort, generally
consisting of the misappropriation of a business's property by another business." Sussex
Commons Outlets, L.L.C. v. Chelsea Prop. Grp., Inc., No. A-3714-07T1, 2010 WL 3772543, at
*9 (N.J. Super. Ct. App. Div. Sept. 23, 2010) (citing cases). "'There is no distinct cause of
action for unfair competition. It is a general rubric which subsumes various other causes of
action' for unlawful interference with a current or prospective economic interest." Tipton v. UGo, Inc., No. A-1543-12T3, 2014 WL 4231363, at *8 (N.J. Super. Ct. App. Div. Aug. 28, 2014),
Synygy claims that "ZS possessed and harbored an intent to harm Synygy by interfering
with Synygy's contractual and prospectively contractual relationship with Novo." Second Am.
Com pl. ,[ 141. Synygy also claims that "ZS jointly and severally, possessed and harbored an
intent to harm Synygy by interfering with Synygy's contractual and prospectively contractual
relationship with Schering-Plough." ld. at~ 153. Further, Synygy claims that "ZS intentionally
interfered with Synygy's business relations with its clients." ld.
161. Defendants argue that
"Synygy's three interference counts are no different" from its claim for copyright infringement.
Defs.' State Law Mem. at 20. They assert that "the only extra element alleged is ZS' purported
'knowledge' of a Synygy-Novo 'contractual relationship' and an 'intent to harm Synygy by
interfering' with that relationship." Id. (citation omitted). I agree with defendants that "[t]his
does not suffice as an extra element establishing a qualitative difference .... " Id.
"[N]umerous courts have found that tortious interference is generally preempted by the
Copyright Act." MCS Servs., Inc. v. Johnsen, No. 01-4430,2002 WL 32348500, at *7 (E.D. Pa.
Aug. 13, 2002); see also Tegg Corp., 650 F. Supp. 2d at 429 (citing cases). "[T]he act of
marketing with intent to interfere with existing contractual relationships does not constitute an
extra element necessary to protect the tortious interference claim from preemption." Tegg Corp.,
650 F. Supp. 2d at 430-31. The "additional elements of awareness and intentional interference
... do not establish qualitatively different conduct on the part of the infringing party, nor a
fundamental nonequivalence between the state and federal rights implicated. In both cases, it is
the act of unauthorized publication which causes the violation." Harper & Row v. Nation
quoting C.R. Bard, Inc. v. Wordtronics Commc'ns, 235 N.J. Super. Ct. 168, 172 (Law Div.19
89). "New Jersey common law unfair competition includes, but covers a broader spectrum of
behavior than, service mark infringement." Holiday Inns, Inc. v. Trump, 617 F. Supp. 1443,
1465 (D.N.J. 1985) (citations omitted).
Enters., 723 F.2d 195 (2d Cir. 1983). "PlaintitT's ultimate claim(s are] based on its right to
prevent unlawful interference with its right to distribute and reproduce its copyrighted [software
macros and incentive compensation report scorecards] to current and future parties, and create
for those parties derivative works based on its copyrighted [materials]." Tegg Corp., 650 F.
Supp. 2d at 431. These claims are not qualitatively different from plaintiffs claim for copyright
infringement and therefore are preempted. The same follows for plaintiff's claim for unfair
competition under New Jersey common law to the extent that it "historically has been considered
a subspecies of the class of torts known as tortious interference with business or contractual
relations." Sussex Commons Outlets, L.L.C. v. Chelsea Prop. Grp., Inc., No. A-3714-07T1,
2010 WL 3772543, at *9 (N.J. Super. Ct. App. Div. Sept. 23, 2010) (citing cases). I will grant
summary judgment in favor of defendants on plaintiff's tortious and intentional interference
claims and its claim for unfair competition under New Jersey Common law to the extent that the
claims relate to Synygy's software macros and incentive compensation report scorecards.
New Jersey Fair Trade Act (Count IV) 15
N.J.S.A. 56:4-1 provides that "(n]o merchant, firm or corporation shall appropriate for
Defendants also contend that summary judgment is warranted in their favor on
Synygy's claims for unfair competition, including its claim under the New Jersey Fair Trade Act,
.because Synygy has not set forth evidence that "Novo was ever confused or misled about the
source of its IC reports." Defs.' State Law Reply at 14. The Fair Trade Act is the state statutory
equivalent of section 43(a)(1) of the Lanham Act. See FM 103.1, Inc. v. Universal Broad. of
New York, Inc., 929 F. Supp. 187, 198 (D.N.J. 1996). As with a claim under the Lanham Act,
plaintiff's claim under the Fair Trade Act is "broad enough to cover the use of trademarks which
are likely to cause confusion, mistake, or deception of any kind, not merely of purchasers nor
simply as to source of origin." Kos Pharm., Inc. v. Andrx Corp., 369 F.3d 700, 711 (3d Cir.
2004) (citation and internal quotation omitted). "[S]ummary judgment is appropriate if the Court
is satisfied that the products or marks are so dissimilar that no question of fact is presented."
Fresh Prepared Foods. Inc. v. Farm Ridge Foods LLC, No~ 10-6310,2013 WL 4804816, at *11
(D.N.J. Sept. 9, 2013) (citation omitted). On the record before me, I find that material questions
of fact remain with respect to whether Synygy has shown that defendants' use of ... created a
likelihood of confusion. I therefore decline to grant summary judgment in defendants' favor on
this basis with respect to Synygy's claim for unfair competition under New Jersey common law.
his or their own use a name, brand, trade-mark, reputation or goodwill of any maker in whose
product such merchant, firm or corporation deals." N.J.S.A. 56:4-1. Synygy claims that
defendants "unlawfully appropriated for their own use [Synygy's] trade secrets and confidential
business and technical information'' and that they harmed Synygy when they unlawfully used the
trade secrets and confidential information in their businesses and when Novo disclosed the trade
secrets and confidential information to ZS and others." Second Am. Compl.
Synygy's second amended complaint alleges that defendants' "conduct in 'passing off Synygy
trade secrets, confidential business and technical information goods and services as their own has
caused confusion between the goods and services ofSynygy and ZS." Id.
alleges that "ZS's and Novo's joint and several use in commerce of the Synygy trade secrets and
confidential business and technical information ... without Synygy's consent has and is likely to
cause confusion, or to cause mistake, or to deceive as to the origin, sponsorship, or approval of
their goods, services or commercial activities by another person." Id.
Unfair competition claims have been held to be preempted by the Copyright Act when
they are premised on a "reverse passing off'' theory. Fun-Damental Too Ltd. v. Universal Music
Group, Inc., No. 97-1595, 1997 WL 381608, at *4 (E.D. Pa. July 8, 1997); see also Schiffer
Publ'g, Ltd. v. Chronicle Books, LLC, 350 F. Supp. 2d 613,619-20 (E.D. Pa. 2004) (finding
preemption barred an unfair competition claim under a reverse passing off theory). "Reverse
passing off'' occurs when "(t]he producer misrepresents someone else's goods or services as his
own." Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23, 27 n.l (2003). Reverse
passing off is "grounded in the alleged unauthorized copying and use of another's copyrighted
expression." Fun:..Damental Too, 1997 WL 381608, at *4-5. Where an unfair competition claim
"rest(s] squarely on the unauthorized act of copying and distributing," an allegation that
defendants' actions were "likely to cause mistake, confuse or deceive the general public" has
been tound insutlicient "to pass the extra element test." Daley v. Firetree, Ltd., No. 04-2213,
2006 WL 148879, at *4 (M.D. Pa. Jan. 19, 2006).
Defendants argue that "Synygy' s unfair-competition counts allege no more than a reverse
passing-off theory, namely that ZS and Novo copied allegedly protected elements of Synygy' s
report designs and passed them off as their own." Defs.' State Law. Mem. at 21. Indeed, in
paragraph 127 ofSynygy's second amended complaint, Synygy asserts that defendants "engaged
in unfair competition by utilizing Synygy's trade secrets, confidential business and technical
information, and other goods and services and passing those trade secrets, goods and services off
as their own." Second Am. Compl. ~ 127 (emphasis added). In its response to defendants'
motion for summary judgment Synygy has not provided any reason for me to find that its claims
for unfair competition are anything other than claims for reverse passing off. "Any confusion
[arising from defendants' conduct] is a result of the alleged unlawful copying and distributing,
and does not make the unfair competition claim[s] qualitatively different from the copyright
claim." Daley, 2006 WL 148879, at *5. To the extent that Synygy's unfair competition claims
arise out of the alleged wrongful use of Synygy' s software macros and incentive compensation
report scorecards, they are equivalent to Synygy's copyright claim and are therefore preempted.
To the extent that defendants' claims for unfair competition arise out of actions other-than the
claimed infringement of Synygy' s copyrighted works, they are not preempted. See Pl.'s State
Law Opp'n Mem. at 40 ("Synygy's unfair competition claims ... [are also based on] the
misappropriation and disclosure of Synygy's trade secrets ... and other confidential information
not subject to copyright.").
Breach of Contract (Count VI) 16
Under Section 8 of the Synygy-Novo contract, Novo agreed not to "divulge, disclose,
convey or permit the disclosure of any of the Proprietary Information of [Synygy], either
verbally or in writing, to any person, corporation, or third party .... " Defs.' Ex. 14 at
SYN0000700. Synygy asserts that "under the terms of the Novo Contract, Novo was required to
maintain all [working copies of the Synygy Software, Synygy Reports, and the Confidential
Information contained therein] as confidential and not disclose [them] to anyone without
Synygy's permission." Second Am. Compl.
78. Synygy claims that Novo breached its
contract with Synygy "by reproducing, distributing and using copies of the Synygy Software
Macros, the Synygy Reports and other Confidential Information without the right or Synygy's
permission." Second Am. Compl.
132. Synygy contends that its breach of contract claim
against Novo is not preempted under the Copyright Act because it has "extra elements" which
make it qualitatively different from its copyright claim. Pl.'s State Law Opp'n Mem. at 30-32.
Defendants argue that Synygy's breach of contract claim is preempted because ''there is no
qualitative difference between the conduct proscribed in§ 8 and the conduct proscribed by the
Copyright Act .... " Defs.' State Law Reply at 8.
In their motion for summary judgment on plaintiffs state law claims, defendants
also contend that summary judgment is warranted in their favor on plaintiffs breach of contract
claim because Synygy has no evidence of a contract breach. Defs.' State Law Mem. at 25.
Defendants contend that Synygy' s breach theory fails "because of an express exclusion built into
section 8, which makes clear that the nondisclosure restrictions of that section do not apply to
'Proprietary Information' that is or becomes public knowledge.'" Id. at 26. They argue that the
record is "unambiguous" that the relevant "Proprietary Information" "was all in fact publicly
disclosed by Synygy during client pitches, at trade shows, and in a book published by the
company's CEO." Id. Synygy counters that 'there is absolutely no evidence that Synygy ever
publicly disclosed the customized deliverables that it designed and produced for Novo." Pl.'s
State Law Opp'n Mem. at 37. I decline to grant summary judgment in defendants' favor on the
basis of their public disclosure argument as I find that material questions of fact remain with
respect to whether Novo's disclosures to ZS were in breach ofNovo's obligations to Synygy
under the terms of their agreement.
While it is not a settled question, 1'the general rule is that matters involving breach of
contract claims are not preempted because a breach of contract claim requires an extra element
that renders the claim qualitatively different from a claim for copyright infringement: a promise
by the defendant." MCS Servs., Inc., 2002 WLJ2348500, at *5 (citations and internal
quotations omitted); see also Am. Bd. oflnternal Medicine v. Von Muller, No. 10-2680,2012
WL 2740852, at *7 (E.D. Pa. July 9, 2012) ("Although not a bright-line rule, the vast majority of
courts in this circuit and elsewhere that have addressed the issue of contracts and preemption
under Section 301 of the Copyright Act have found that the rights protected by breach of contract
claims are not the same as copyright rights.") (citations, internal quotations and alterations
omitted); Mainardi v. Prudential Ins. Co. of Am., No. 08-3605, 2009 WL 229757, at *7 (E.D. Pa.
Jan. 30, 2009) ("district courts within the circuit have agreed that an extra element exists in a
breach of contract claim"). In CollegeSource Inc. v. AcademyOne, Inc., 2012 WL 5269213, at
*9, the Court explained that the extra elements that distinguish a breach of contract claim from a
claim under the Copyright Act include: "the existence of a contract or agreement," including
proof of "offer, acceptance, and consideration to establish that a contract exists." Further,
"[b ]ecause contract is in personam and copyright is in rem, a judgment on the basis of contract
law will impact a third party's rights differently." Id. But see Wrench LLC v. Taco Bell Corp.,
256 F.3d 446, 457 (6th Cir 2001) ("If the promise amounts only to a promise to refrain from
reproducing, performing, distributing or displaying the work, then the contract claim is
Synygy's breach of contract claim arises out ofNovo's alleged broken promise to abide
. by the terms and conditions of the pledge of honesty which she signed prior to taking the
examination. While unquestionably similar, the claims are not identical.
Plaintiff claims that "Novo's breach of the contract is not limited to its promise to refrain
from using, copying, distributing and creating derivate works from Synygy' s copyrighted
materials, but rather includes a breach of the confidentiality obligations under Section 8 of the
Synygy-Novo Contract." Pl.'s State Law Opp'n Mem. at 31. As plaintiff contends, "[s]uch a
promise of confidentiality and nondisclosure is qualitatively different from a promise not to
infringe Synygy's copyrighted works." Id.at 31-32. "While unquestionably similar, the claims
are not identical." Am. Bd. oflntemal Med., 2012 WL 2740852, at *7. I will not grant
summary judgment in defendants' favor on Synygy' s breach of contract claim on the basis of
PUTSA Preemption - Trade Secret Misappropriation
In its response to defendants' motion for summary judgment with respect to Synygy's
state law claims, Synygy argues that its state law claims are not preempted under the Copyright
Act because they "are based on defendants' misappropriation and disclosure ofSynygy's trade
secrets in addition to acts of copyright infringement." Pl.'s State Law Opp'n Mem. at 1; see also
id. at 25-29 ("defendants' preemption theory ignores the fact that their wrongdoing is not limited
to the mere infringement of Synygy's copyrighted reports and software macros"). However, as
defendants contend in their reply brief, "there is an express preemption clause governing trade
secret claims as well, found in the PUTSA, 12 Pa. Cons. Stat. Ann. §§ 5301-5308." Defs.' State
Law Reply at 4. Section 5308 provides that "this chapter displaces conflicting tort, restitutionary
and other law of this Commonwealth providing civil remedies for misappropriation of a trade
secret." 12 Pa. Cons. Stat. Ann. § 5308(a). The PUTSA thus preempts state law tort claims
"based on the same conduct that is said to constitute a misappropriation of trade s'ecrets." Youtie
v. Macy's Retail Holding, Inc., 653 F. Supp. 2d 612, 620 (E.D. Pa. 2009). Defendants thus
contend that, to the extent that plaintiff's claims for unfair competition, tortious and intentional
interference, conversion and unjust enrichment are not barred by copyright preemption, summary
judgment is warranted in their favor for plaintiff's claims under Pennsylvania law on the basis of
PUTSA preemption. Defs.' State Law Reply at 3-6.
However, given that disputed issues of material fact remain with respect to whether
defendants misappropriated any Synygy trade secrets, as is further set forth above, I decline to
grant summary judgment in favor of defendants on the basis ofPUTSA preemption. See PNC
Mortg. v. Superior Mortg. Corp., No. 09-5084,2012 WL 628000, at *15 (E.D. Pa. Feb. 27,
2012); see also Bro-Tech Corp. v. Thermax, Inc., 651 F. Supp. 2d 378,412 (E.D. Pa. 2009)
(denying summary judgment on PUTSA claim and noting that "due to the displacing effect of
[the PUTSA], if and when any Defendants are found at trial to have misappropriated [the
plaintiti's] trade secret information, [the plaintiff's] other tort or restitutionary claims against
them will be preempted to the extent such claims are predicated on misappropriation of trade
secrets as opposed to confidential or proprietary information of other sorts"). "[I]f a jury
determines that the information at issue in this case constitutes a trade secret under PUTSA, then
many of Plaintiffs common law remedies will be preempted" insofar as they arise out of
defendants' conduct with respect to any trade secrets belonging to Synygy. PNC Mortg., 2012
WL 628000, at *15, citing 12 Pa. Cons. Stat.§ 5308.
An appropriate Order follows.
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